Tax Preparation IRS Rules, Retirement, and Special Topics

Question 1

What is the 2024 contribution limit for a traditional or Roth IRA (under age 50)?

Accepted Answer

$7,000

Answer

$5,500

Answer

$6,000

Answer

$8,000

Question 2

Required Minimum Distributions (RMDs) from traditional IRAs must generally begin at age:

Accepted Answer

73

Answer

70½

Answer

72

Answer

75

Question 3

A 52-year-old withdraws $15,000 from a traditional IRA. The early withdrawal penalty does NOT apply because:

Accepted Answer

No exception exists and the penalty applies

Answer

They are over 50 years old

Answer

They are over age 59½, so no penalty applies — wait, they are 52, so the penalty does apply

Answer

The distribution is under $20,000

Question 4

Contributions to a Roth IRA are made with:

Accepted Answer

After-tax dollars and qualified withdrawals are tax-free

Answer

Pre-tax dollars and grow tax-free

Answer

Pre-tax dollars and distributions are taxed

Answer

After-tax dollars and distributions are taxed

Question 5

What is the penalty for failing to take a required minimum distribution from an IRA?

Accepted Answer

25% of the amount not distributed

Answer

10% of the RMD amount

Answer

50% of the amount not distributed

Answer

A flat $500 penalty

Question 6

The Net Investment Income Tax (NIIT) of 3.8% applies to which taxpayers?

Accepted Answer

Taxpayers with MAGI over $200,000 (single) or $250,000 (MFJ)

Answer

All taxpayers with investment income

Answer

Only corporate taxpayers

Answer

Self-employed individuals with rental income